The number of hardware startups with over $100M funding grew 4X since 2014

BANGALORE, INDIA: Connected hardware phenomenon has brought the investor community’s interest back in the hardware startups like never before.

The number of hardware startups with over $100 million funding quadrupled since 2014 from 8 to 36 and 18 hardware startups have emerged as unicorns, reveals the recently released Hardware Trends Report by China-based hardware accelerator, HAX.

Benjamin Joffe, Partner, HAX says “Both public and private investors are attracted to the technology and revenue of hardware startups. The number of hardware unicorns is already half of what the world’s total – including software – was in 2013.”

“Software is eating the world and the world is hardware. You need both to make it smarter”

Yes that is what HAX believes. HAX has recorded a re-invention in every physical product category and industry, with renewed interest of the investors in the hardware space of late.

The top hardware companies like FitBit, GoPro and DJI Drones are around a decade old now, the software giants like Facebook, Google, Amazon, Microsoft and others are either building their own hardware or buying hardware startups, and driving adoption of platforms that facilitate the easy use of connected devices.

Various industries, from construction to insurance, have been adapting to this maturing space – largely driven by the efficiency improvements and data generation that connected hardware is making possible.

Releasing the report in India, Nihal Kashinath, Founder and CEO of Applied Singularity said, “In 2015-16, innovation in connected hardware far outpaced adoption. 2017 looks like the year when adoption will start catching up in a big way, even though innovation continues to accelerate.” With machine learning, computer vision and artificial intelligence also starting to see increased usage, hardware’s importance is growing even faster as it serves as a critical tool (and sometimes the only tool) for data acquisition for AI.

In India, the ecosystem for IoT and AI is flourishing at grassroot levels, which makes India a bright spot for IoT and AI, along with China and the US. The Indian ecosystem, companies and governments are coming together to increase momentum and create new opportunities in the space.

Enterprise IoT is growing faster than Consumer IoT

While consumers are adopting more and more hardware solutions, as evidenced through increasing crowdfunding support, enterprises are discovering significant value in sectors such as Mining, Agri Tech, Logistics, Utilities, Retail and Building Management through augmenting processes, tracking physical assets, predicting maintenance and managing resources.

The connected mining industry is expected to reach $10 billion by 2020. Agri Tech would also see increasing valuations globally as it scales up to meet the rising food demand of the growing global population. Using advanced sensors, solutions are optimizing the use of water and fertilizer, avoiding spoilage of crops, monitoring livestock, and improving the selective breeding of animals. Industries are seeing tremendous automation with robots joining the workforce leading to the rise of “Dark Factories”.

Many startups are now focusing on Enterprise IoT solutions, but the sales cycle is longer and more challenging than in the B2C space. Cyril Ebersweiler, Founder & Managing Director, HAX observes, “To grow in the enterprise it can be essential to be public. When a contract is $1 million it is not a joke anymore; clients make reference calls.”